VIC Deposit refund in private car sale

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MaggieL

Member
19 November 2019
2
0
1
My son recently paid a $500 holding deposit for a car, for sale by a private person at $17,000. The deposit was requested by the seller when we asked for the car to be taken to and inspected by our mechanic. It was paid by bank transfer, with the label Holding Deposit and rego number of the car.
On inspection, our mechanic wrote a report detailing items that would need to be tended to prior to purchase. We decided not to proceed with the sale on the basis of the report which was, in goodwill, shared with the vendor.
The vendor is now refusing to refund the deposit. My understanding is that a deposit is by nature, fully refundable unless stipulated prior to payment. Vendor has suggested he may pay part back, less his “time & expenses” incurred in taking his car to our mechanic (incidentally close to his home...). I have stated that I don’t believe this to be legal either.
Could someone please advise what our next move should be? Grateful for any advice, thank you.
 

Jake Matherson

Well-Known Member
15 June 2018
223
29
659
You would need to agree to the terms of deposit in writing and specifically the terms of refund if any.

Sounds like your son said "I'll pay you $500 to hold the car for me" which the seller did.

Just my guess as i'm not a lawyer, merely a punter on this forum but I would suggest your son will end up $500 out of pocket. A bit less if he's lucky and the seller is feeling generous.

This is from Queensland but I doubt it will be much different in Victoria
Buying privately
 

MaggieL

Member
19 November 2019
2
0
1
Thanks for your response, Jake.
No, as stated, the deposit was at vendor’s request. When it was paid, a screenshot of the transaction was sent and it was clearly marked “Holding Deposit” - if the vendor wanted different terms, shouldn’t this have been stated or noted? Or termed as non-refundable when it was requested?
 

Jake Matherson

Well-Known Member
15 June 2018
223
29
659
I buy and sell the odd car or motorcycle from time to time. So my comments are based of the different deals I have done with people including accepting a deposit to hold a car for a week while the buyer organises their funds and their father to inspect the car.

The car was roadworthy and in good working order. If their father didn't like the car for whatever reason, cool no worries. I'm keeping the deposit and putting the car back up for sale.

The seller requested a deposit of $500 to hold the car for your son and not sell it to anybody else. (holding deposit)
He even agreed to take it to your mechanic.
I doubt he agreed in writing to refund the deposit pending the assessment outcome.

Morally what the seller did might have been wrong if he was trying to sell your son a dodgy car but I don't think the seller would have gone to the effort of delivering the car to your mechanic if the seller thought the car was no good.

But short of strongly worded email/message requesting your money back from you or a lawyer which will just cost you more money I doubt there is anything you can do as the contract between the seller and your son sounds quite open to interpretation.

There are a few lawyer/smart folks on here that might chime in with better advice. Fingers crossed.
 

Atticus

Well-Known Member
6 February 2019
649
116
2,394
Vendor has suggested he may pay part back, less his “time & expenses” incurred in taking his car to our mechanic (incidentally close to his home...).
I would take this....

I tend to agree with Jake.... If you had included words to the effect of... Balance payable on a mechanics assessment that we find acceptable... you may have had solid grounds to pursue a civil claim, but even then, a magistrtae would probably deem it fair that he be compensated a 'reasonable' amount for time & expenses... the full $500 seems a bit rich